What is the average rate of return on premium bonds?
The nearest thing Premium Bonds have to an interest rate is their annual prize rate, which is currently 1.4%.
NS&I states that if a transfer takes a person over the £50,000 limit, then the transfer will be automatically refunded in full to the bank account. As such, NS&I suggests those interested take a look at their Premium Bonds balance ahead of investing.
There was good news this week for Britain's 21 million-strong army of premium bond holders: your chance of winning is about to increase. NS&I has announced that the premium bond “prize fund rate” – the proportion of the total amount invested paid out in prizes – is being upped from 1% to 1.4% next month.
A There are all sorts of theories. However there is absolutely no evidence that holding premium bonds in a single block has a better chance of winning.
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What are my odds of winning with Premium Bonds?
| Prize value | Number of prizes | Odds of winning from £1 bond |
|---|---|---|
| £50,000 | 11 | 1 in 10,218 million |
| £25,000 | 22 | 1 in 5,109 million |
The interest rate paid on Direct Saver, Income Bonds, Direct ISA and Junior ISA, will increase from today (21 July 2022). The interest rate paid on Guaranteed Growth Bonds, Guaranteed Income Bonds and Fixed Interest Savings Certificates will also be increasing, effective from 1 August 2022.
While the chance of any win at all with a £1 bond is 24,500, in May, the chances of winning £1 million were 1 in 58.91 billion - which is vanishingly small. “Even after the prize rate changes, there will still only be two million pound prizes, so the odds of winning a million haven't improved.
Disadvantage: Initial delays:
Bonds purchased are entered into their first prize draw after they have been held for a full prize cycle. That means that Bonds bought during March will be held back until the May prize draw. That means that, borrowing from your Premium Bonds could mean that you miss a winning month.
What are the prize amounts for premium bonds? Most recently, the total prize amount for premium bonds was £96,395,075. The prizes are banded into higher value (£5,000 to £1 million), medium value (£500 and £1,000) and lower value prizes (£25, £50 and £100). There are around 3.3 million prizes in total every month.
Premium Bonds could be worth investing in if you: Have a lot of money to save (the more bonds you have, the bigger your chance of winning a prize) Pay tax on savings interest (and have already used up your annual cash ISA allowance) Like the idea of a prize draw (you could win big, but you also may not win anything)
Can a premium bond win twice?
Can you win more than one prize on premium bonds? Yes, however, each £1 bond can only have the chance to win one prize per month. They can win time and time again though.
However, you are gambling with the interest that you would normally earn by putting that money into an ISA with a similar interest rate. Premium Bonds are not considered gambling by the Gambling Commission and therefore it is not affected by gambling regulation changes.
Bonds protect against deflation: The biggest risk to bonds over the long term is inflation. That's always a risk. But bonds also help protect you against deflation. When there's inflation, your bond income is worth less over time, but in a deflationary environment, they're actually worth more.
Premium Bonds and Cash ISAs are better for those who don't need to access their savings immediately and don't want to take on too much risk. If you are comfortable with not generating a regular return and you'd like the opportunity of winning a tax-free prize, then it could be better to pick Premium Bonds over an ISA.
Currently, the income bonds account with NS&I has a 0.50 percent interest rate.
The best savings account interest rates are around 1%. At a brick-and-mortar bank, you'll often find savings rates closer to the national average, which is currently 0.10%.
NS&I has increased the interest rates on its Direct Saver and Income Bonds to 0.50%, from today (10 February 2022).
NS&I will increase the Premium Bonds prize fund rate from 1.00% to 1.40%, effective from the June 2022 Premium Bonds prize draw.
Premium Bonds holders can check to see if they have won a prize in April's prize draw, by using the nsandi.com prize checker, official prize checker app or their Alexa-enabled device from Saturday 2 April 2022.
Are my old Premium Bonds still valid? Yes. As long as you haven't cashed your Bonds in, they're still valid and they're still being entered into our monthly prize draws.
What are the chances of winning 1 million on Premium Bonds?
While the chance of any win at all with a £1 bond is 24,500, in May, the chances of winning £1 million were 1 in 58.91 billion - which is vanishingly small. “Even after the prize rate changes, there will still only be two million pound prizes, so the odds of winning a million haven't improved.
Disadvantage: Initial delays:
Bonds purchased are entered into their first prize draw after they have been held for a full prize cycle. That means that Bonds bought during March will be held back until the May prize draw. That means that, borrowing from your Premium Bonds could mean that you miss a winning month.
What are the prize amounts for premium bonds? Most recently, the total prize amount for premium bonds was £96,395,075. The prizes are banded into higher value (£5,000 to £1 million), medium value (£500 and £1,000) and lower value prizes (£25, £50 and £100). There are around 3.3 million prizes in total every month.
NS&I will increase the Premium Bonds prize fund rate from 1.00% to 1.40%, effective from the June 2022 Premium Bonds prize draw. The odds of each £1 Premium Bond number winning a Premium Bonds prize will also change from 34,500 to 1 to 24,500 to 1.
Premium Bonds could be worth investing in if you: Have a lot of money to save (the more bonds you have, the bigger your chance of winning a prize) Pay tax on savings interest (and have already used up your annual cash ISA allowance) Like the idea of a prize draw (you could win big, but you also may not win anything)
Bonds protect against deflation: The biggest risk to bonds over the long term is inflation. That's always a risk. But bonds also help protect you against deflation. When there's inflation, your bond income is worth less over time, but in a deflationary environment, they're actually worth more.
Premium Bonds and Cash ISAs are better for those who don't need to access their savings immediately and don't want to take on too much risk. If you are comfortable with not generating a regular return and you'd like the opportunity of winning a tax-free prize, then it could be better to pick Premium Bonds over an ISA.
Premium Bonds holders can check to see if they have won a prize in April's prize draw, by using the nsandi.com prize checker, official prize checker app or their Alexa-enabled device from Saturday 2 April 2022.
Are my old Premium Bonds still valid? Yes. As long as you haven't cashed your Bonds in, they're still valid and they're still being entered into our monthly prize draws.
We pay out two £1 million jackpots each month. We then divide the balance of the prize fund share allocated to the higher value band equally among the remaining prize values. First we work out the number of £100,000 prizes.
Will NS&I increase interest rates March 2022?
NS&I has increased the interest rates on its Direct Saver and Income Bonds to 0.50%, from today (10 February 2022).
The best savings account interest rates are around 1%. At a brick-and-mortar bank, you'll often find savings rates closer to the national average, which is currently 0.10%.
Currently, the income bonds account with NS&I has a 0.50 percent interest rate.
